Using the $8000 Tax Credit in RI!

Using the $8000 Tax Credit in RI!

I am going to give you some information on using the $8000 Tax Credit in RI. I know there is some confusion about things that have been heard about this tax credit and I was even confused when I first heard about it.

The biggest confusion for me was I heard about this $8000 Tax Credit and I thought it was only a tax deduction that you get for buying say a hybrid car. It's totally different! Basically, it could put you in a totally different tax bracket, because it reduces the amount of tax you owe to the IRS. If you were to do your taxes without it and you owe $8000, with this $8000 Tax Credit, you would owe nothing!

Also, some people have heard about using the $8000 Tax Credit as a downpayment for your home but unfortunately for us here in RI, there are only a few states that are eligible for that and we are not one of them.

Did you know that time is running out to be eligible for the $8000 Tax Credit? You need to be closed on a house by November 30th! Not the end of the 2009, as in December 31st, that is too late!

Are you wondering if you are eligible for the $8000 Tax Credit? Well you do need to jump over a few but easy hurdles ... You need to be a First time home buyer and even if you are a nonresident alien (as defined by the IRS) using an FHA loan you could qualify. There are also some income limitations.

The definition of a "First time home buyer" in qualifying for the $8000 Tax Credit is different than many people would have thought! You could be considered a "First time home buyer" even if you have owned a home before! That's right, you could qualify and could receive the $8000 Tax Credit if the last time you purchased a house was over 3 years ago. There is a small catch to that... if you are married than that goes for both spouses. (For Example, It is 2009 and you last bought a home as a single person in 2002 and now you got married last year and your spouse bought her last house in 2007, you would not qualify for the $8000 Tax Credit)

The income limitations I mentioned before? You need to make less than $75,000 a year to get the full $8000 Tax Credit if you are a single person and if you are legally married and filing a joint return, the combined income needs to be less than $150,000.

So what about actually getting this $8000 Tax Credit from the government, how do you do that? Well, all home buyers wanting to apply for this credit need to complete the IRS Form 5405 to determine the tax credit amount and then claim this on Line 69 of their 1040 income tax return. No other forms are required as long as you are qualified as stated above.

So I'm sure you are also wondering if you can buy even that cozy cottage that you have been pining over recently and still quality for the $8000 Tax Credit ... Absolutely! Any home that you will use as a principal residence qualifies you for the $8000 Tax Credit. This includes single family homes, condos and even houseboats! DON'T wait - Time is running out!

So what is your next step, you ask?

1. Contact me at mypickettfence@yahoo.com so we can start looking for your new home.

2. Contact my associate John Dionne at Shamrock Financial at John.Dionne@shamrockfinancial.com to find out how the $8000 Tax Credit can work for you!